|
Freeze on taxes for seniors is complex
Income or wealth limit is a key point of contention
By Jon W. Sparks, Commercial Appeal
April 8, 2007
In November, voters overwhelmingly approved an amendment to the state constitution that allows property taxes to be frozen for senior citizens.
Simple, yes?
Not at all.
"The devil is in the details," said Bartlett Mayor Keith McDonald. The 83 percent vote of approval easily put the amendment into the state constitution, but these days the General Assembly is working on enabling legislation that will fix the particulars of how it's done and who it will affect.
In principle, most politicians are for the concept. Rep. Jim Coley, R-Bartlett, said, "It will stabilize the tax base by lowering it for elderly people. Shelby County's tax base is deteriorating and we need to stabilize it to provide services and draw people here to stay."
But those devilish details involved in putting it together include setting an annual income or wealth limit for eligibility and that's a key point of contention.
Senate Republican Leader Mark Norris of Collierville was a key backer of the amendment and is pressing hard to get an enabling bill passed. "The higher the level the better, because more people are protected," he says, "but unfortunately if it's too high, cities and counties will not participate."
That's another thing: Counties and municipalities don't have to grant the tax freeze. It is expected that most will opt in -- it would seem churlish to deny a tax break to seniors and politically foolish to ignore sentiment that runs 4-to-1 for it. But as cities and counties raise tax rates, older residents won't be contributing to the increase. What's more, the burden will fall more and more on younger homeowners.
Legislators are working on coming up with a number or perhaps a formula that would get a green light.
Norris and Democratic Rep. John DeBerry of Memphis have proposed a bill that sets a $50,000 annual income cap for eligibility. Another bill circulating would put it at $60,000.
Those figures are too high, says McDonald, who is on the board of the Tennessee Municipal League. McDonald says the league is not opposed to tax breaks for seniors but wants a more modest figure. The organization favors a $20,000 limit that would match the state's existing low-income elderly tax relief program.
A twist in the debate came last month in the form of an opinion by the state's attorney general that opened up the possibility of a compromise. The question was whether the legislature could set a maximum limit while allowing cities and counties to set their own lower limit.
The opinion said that language in the amendment did not allow for local determination of the limit. However, Atty. Gen. Robert Cooper did say that median income could be established as the limit, so current discussions in the General Assembly have focused on that.
Norris said establishing the limit as the median income of seniors in each county was a formula he wanted to test to see if it would accomplish enough.
Sentiment seems to be that it's time for a bill to be enacted.
-- Jon W. Sparks: 529-2533
What's the impact?
Figures from the state comptroller's office show that in Shelby County, 18.69 percent of households are owned by people 65 or older, or 46,521 of the 248,958 total.
If the income level were set at $60,000, 82.4 percent of those households would qualify for a freeze; 76.4 percent if the level were set at $50,000.
For every cent of property tax increase in the future, Shelby County would lose $124,935 in revenue because of a freeze at the $60,000 level. At $50,000, the loss would be $115,837 per penny.
The Bartlett Board of Mayor and Aldermen is considering an 18-cent increase in the city's property tax. If the level were set at $50,000 and the freeze enacted before the tax hike, the impact would be $182,430 annually. At $60,000, it would be $196,558.
-- The Commercial Appeal
|
ApexTek.Com